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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: dara who wrote (26321)	2/11/2005 7:05:21 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

Over three fourths of the gold long position was liquidated in the drop to the 200 MA. I feel at worst gold just starts basing in here for a month, makes solid attempts to get out of the channel, and then busts loose. The shares should start running ahead of that. By and large the Dollar short position has also been covered. Commercials are basically flat the Cdn, the Euro, somewhat long the Yen, and have big longs in the Swiss Franc. The big rally in interest rates came on Wed, and the data is through Tuesday. We can see that the commercials are now short the 30 year. They reduced their 10 year longs by about a fourth, and even if they continued selling that in spades on the big Wed day, they may still be quite long, requiring a bit more work. The commercials are incredibly long Eurodollars, so I would say the specs/funds market are betting against a pause, and may be proven right. I'd like to see another week's liquidation of the commercial 10 year position, and if they hold tight on the long EDs, there may be a spread widening trade developing. The catalyst for spread widening might be reopening the 10 and 30 year Treasury auction, although the last 10 went poorly. 64.82.65.31 Also looks like Uncle Ernie will be brought back out "for a little fiddlin". Message 21040405 The market is now getting set up for a "reflation" trade, followed by a likely USD breakdown again.